Macartney et al. v. Warner [Indexed as: Macartney v. Warner]

46 O.R. (3d) 669

[2000] O.J. No. 31

Docket No. C25214

Court of Appeal for Ontario

Morden, Laskin and Rosenberg JJ.A.

January 11, 2000

Damages -- Deductions -- Death benefits paid to plaintiffs in accordance with s. 11 of Statutory Accident Benefits Schedule following death of their son to be deducted from award of damages for loss of care, guidance and companionship under s. 61(2)(e) of Family Law Act -- Disability benefits and no-fault wage-loss benefits not deductible from award under s. 61(2)(e) -- Family Law Act, R.S.O. 1990, c. F.3, s. 61(2)(e).

The plaintiffs' 19-year-old son was killed in a motor vehicle accident near their home. Both plaintiffs were deeply affected by the death; the female plaintiff was unable to return to work and the male plaintiff could only undertake less stressful and lower-paying employment. The plaintiffs' claim for damages for nervous shock was dismissed, as was their claim for loss of income under s. 61(1) of the Family Law Act. They were awarded damages for loss of care, guidance and companionship under s. 61(2)(e) of the Family Law Act in the amounts of $25,000 to the female plaintiff and $15,000 to the male plaintiff. Both plaintiffs had received no-fault wage-loss benefits from their automobile insurer and the male plaintiff had received disability benefits. They had also received death benefits in accordance with s. 11 of the Statutory Accident Benefits Schedule -- Accidents before January 1, 1994, R.R.O. 1990, Reg. 672. The trial judge held that the no-fault benefits and t he disability benefits were to be deducted from the Family Law Act awards pursuant to s. 267 of the Insurance Act, R.S.O. 1990, c. I.8. The plaintiffs conceded that the death benefits should be deducted from the awards. In the result, they made no recovery on their claims. The plaintiffs appealed.

Held, the appeal should be allowed in part.

The plaintiffs' entitlement to assert a claim for nervous shock and to make a claim for loss of income under s. 61(1) of the Family Law Act are dealt with in a concurrently released judgment.

The awards under s. 61(2)(e) of the Family Law Act were low but were within the accepted range for this type of award. They should not be interfered with by the appellate court.

Only the death benefits paid to the plaintiffs should be deducted from the awards made under s. 61(2)(e). The award under s. 61(2)(e) is akin to the death benefit. Both attempt, in some measure, to compensate the parents solely for the loss of the child, outside of any other pecuniary losses that the parents may have incurred. The no-fault wage-loss benefits and the disability benefits should not have been deducted.

APPEAL from a judgment of Yates J. (1996), 1996 8022 (ON SC), 29 O.R. (3d) 720 (Gen. Div.) awarding damages.

Dall Estate v. Adams (1994), 1994 424 (ON CA), 19 O.R. (3d) 93, 116 D.L.R. (4th) 189 (C.A.), consd Other cases referred to Bannon v. McNeely (1998), 1998 4486 (ON CA), 38 O.R. (3d) 659, 159 D.L.R. (4th) 223, 34 M.V.R. (3d) 189 (C.A.) (sub nom. Bannon v. Hagerman Estate); Fong v. Bamford (1995), 1995 7107 (ON SC), 25 O.R. (3d) 147, 15 M.V.R. (3d) 254 (Gen. Div.); Frawley v. Asselstine (1990), 1990 6803 (ON SC), 73 O.R. (2d) 525, 70 D.L.R. (4th) 536 (H.C.J.); Gorrie v. Gill (1975), 1975 414 (ON CA), 9 O.R. (2d) 73, 59 D.L.R. (3d) 481, [1975] I.L.R. 1-679 (C.A.); Hamilton v. Canadian National Railway Co. (1991), 1991 8348 (ON CA), 47 O.A.C. 329, 80 D.L.R. (4th) 470, 50 C.P.C. (2d) 271 (C.A.); Howes v. Crosby (1984), 1984 2172 (ON CA), 45 O.R. (2d) 449, 2 O.A.C. 375, 6 D.L.R. (4th) 698, 29 C.C.L.T. 60 (C.A.); Koukounakis v. Stainrod (1995), 1995 621 (ON CA), 23 O.R. (3d) 299, 12 M.V.R. (3d) 78 (C.A.); Marshall v. Heliotis (1993), 1993 5505 (ON SC), 16 O.R. (3d) 637, [1994] I.L.R. ô1-3023 (Gen. Div.); Nielsen v. Kaufmann (1986), 1986 2717 (ON CA), 54 O.R. (2d) 188, 13 O.A.C. 32, 26 D.L.R. (4th) 21, 36 C.C.L.T. 1 (C.A.); Reidy v. McLeod (1986), 1986 2556 (ON CA), 54 O.R. (2d) 661, 15 O.A.C. 200, 27 D.L.R. (4th) 317, 36 C.C.L.T. 307 (C.A.); Woelk v. Halvorson, 1980 17 (SCC), [1980] 2 S.C.R. 430, 114 D.L.R. (3d) 385, 33 N.R. 232, 14 C.C.L.T. 181, [1981] 1 W.W.R. 289 Statutes referred to Family Law Act, R.S.O. 1990, c. F.3, s. 61(1), (2)(e) Insurance Act, R.S.O. 1990, c. I.8, ss. 266, 267 Rules and regulations referred to Statutory Accidents Benefits Schedule -- Accidents before January 1, 1994, R.R.O. 1990, Reg. 672, s. 11

David F. Smye, Q.C., and Michael J. Winward, for appellants. Donald G. Cormack, for respondent.

The judgment of the court was delivered by

[1] ROSENBERG J.A.: -- The appellants, Dana and Cecil Macartney, appeal from the judgment of Yates J. [reported 1996 8022 (ON SC), 29 O.R. (3d) 720] dismissing their claim for nervous shock and dismissing their claim for pecuniary loss (loss of income) pursuant to s. 61(1) of the Family Law Act, R.S.O. 1990, c. F.3. They also appeal the quantum of damages awarded for loss of guidance, care and companionship under s. 61(2)(e) of the Family Law Act and the reduction of their damages by the amounts received in no-fault wage-loss benefits and disability benefits. For the reasons that follow, I would allow the appeal in part, as it relates to the reduction of the award under s. 61(2)(e) and from the dismissal of the claim for loss of income under s. 61(1). In all other respects, I would dismiss the appeal.

[2] This is one of three appeals involving Dana and Cecil Macartney arising out of proceedings before Yates J. In 1987, Dana Macartney was involved in a collision with a vehicle driven by Mladen Islic. The reasons for the disposition of the appeal by the Macartneys in relation to that accident have previously been released.

[3] The other two appeals arise out of the death of the appellants' son Jeremy. On the morning of July 7, 1990, Jeremy was killed while he was a passenger in a car driven by the respondent David Warner. The accident occurred about one- quarter mile from the appellants' home. They heard the crash from the accident. The principal claim brought by the appellants was for nervous shock because of this event.

[4] Following the death of their son, Dana Macartney was unable to return to work and Cecil Macartney could only undertake less stressful and lower-paying employment. Prior to trial, the respondent brought a motion under Rule 21 for a determination that the appellants' claim for nervous shock was barred by s. 266 of the Insurance Act, R.S.O. 1990, c. I.8. He also sought a ruling that they could not recover their loss of income under s. 61(1) of the Family Law Act. Yates J., who heard this motion, found in favour of the appellants on both issues. Mr. Warner appealed from that judgment. The trial proceeded in the meantime.

[5] At trial, Yates J. held that, on the facts, the claims for nervous shock were not made out. He also appeared to reverse himself on the Family Law Act issue, and held that the loss of income was not recoverable under s. 61(1) of that Act. He did, however, make awards to the appellants for loss of care, guidance and companionship under s. 61(2)(e) of the Act. There is no dispute that in law it was open to the trial judge to make those awards, notwithstanding s. 266 of the Insurance Act. The appellants contend, however, that the awards are too low, and that the trial judge erred in making certain deductions from the amounts awarded.

[6] In the reasons for judgment in the companion appeal from Yates J.'s decision on the Rule 21 motion, which reasons are being released contemporaneously [reported at 2000 5629 (ON CA), 46 O.R. (3d) 641], I have held that the appellants are precluded from asserting a claim for nervous shock because of the provisions of s. 266 of the Insurance Act. I have also held that the appellants may not claim for their loss of income, due to nervous shock or for any other reason, under s. 61(1) of the Family Law Act. On my interpretation of s. 61(1) it is unnecessary to consider the appellant's claim for nervous shock. Morden and Laskin JJ.A. agree that the appellants may not assert a claim for nervous shock under s. 266 of the Insurance Act, but may make a claim for loss of income under s. 61(1). In view of the unanimous decision with respect to s. 266 of the Insurance Act, the appellants are not entitled to assert a claim for nervous shock and it is therefore unnecessary to consider whether the trial judge was correct in dismissing that claim on the merits. The claim for loss of income under s. 61(1) that a majority of this court would permit does not depend upon a finding of nervous shock. Therefore, it is also unnecessary to consider the reasons of the trial judge with respect to nervous shock in that context. For those reasons, I need not deal with the appellant's appeal from the trial judge's decision that, on the facts, the claim for nervous shock was not made out.

The Facts

[7] In view of my conclusion concerning the claim for nervous shock, it will only be necessary to give a brief review of the facts. Jeremy Macartney and the respondent spent the evening of July 6, 1990 with friends. The respondent consumed a substantial amount of alcohol. At 7:00 a.m. the following day, he and Jeremy left the party. The respondent was to drop Jeremy off at his home. On the way, the respondent lost control of the vehicle. The vehicle left the road and struck two trees. The collision was so violent that the car was severed in two. Jeremy was killed. The trial judge found that the respondent was 100 per cent responsible for the collision.

[8] At the time of the accident, Dana Macartney was in her house waiting for her sister and niece. She was going to accompany them to the niece's riding lesson. She was also expecting Jeremy to return home around the same time. Dana then described what happened:

. . . I believe I had just come down from upstairs, from our bedroom, and the windows were opened and I heard this loud, terrifying crash, and I grabbed -- put my hand up to my chest, up to my heart, and I said to Cec "Did you hear that?" And he said "Yeah". And I said, "What was it?" And he said, "I don't know". And then I proceeded to go to the bathroom. We always had the bathroom window open and you could, when you -- when you were sitting on the toilet you can see out on to the road, on to Ridge Road, and I seen a, I think it was a beige Tempo or a Topaz go by with a police red siren on top. And I came out of the bathroom and I said, "Did you see that, Cec?" And he said, "Yeah, that's unusual that they would use that kind of car." And then we seen ambulances go by. And we were sitting at the living room window, looking up the road. And as we watched all the vehicles go by, there's fire trucks, ambulances and police cars, and we just looked at each other and said "Where's Jeremy?" And Cec just said,

"No, not Jeremy." And we just watched. I got the binoculars and tried to see what I could see. And I see a water truck up there and hoses and everything and, uhm, could see all the neighbours coming out because they had all heard it, and they were all out on their front lawns. And we went outside and Cec went up the road to see if he could see what it was. And when he came back he said he couldn't get through because they had the road blocked off. And one of the neighbours had told him that it was a gas leak or something.

[9] Dana testified that the moment she heard the crash, she believed that Jeremy had died. Nevertheless, she went with her sister and niece to the riding lesson. When she returned home, her husband told her that Jeremy had died in the accident. She went outside and knelt on the front porch. A short time later a flatbed truck went by with the respondent's car on it.

[10] Dana was deeply affected by the death. She virtually abandoned any household chores, leaving them to Cecil and her other son. She never returned to regular employment. She did, however, eventually take on other work, such as training dogs, part-time. She had difficulty sleeping, lost interest in eating, and experienced panic attacks. She was prescribed drugs for depression.

[11] Cecil also heard the crash. After being unable to get to the scene of the crash to see what had happened, he went to the store. About two hours later, the police informed him of Jeremy's death. Cecil testified that he could not get that day out of his mind, especially the loud noise from the collision. He had difficulty sleeping and was prescribed medication for depression. He had been employed at Stelco since 1973. His job at the time of the accident required considerable concentration. After the death, he found that he was unable to concentrate and he was given a less stressful and lower paying job at Stelco. Both appellants received no-fault wage-loss benefits from their automobile insurer and Cecil received disability benefits.

[12] The parties called several expert witnesses and filed the reports of other experts. Most of the expert and, indeed the other evidence, was directed to proof of the nervous shock claim. In summary, the expert evidence called by the appellants showed that the death of their son had a profound impact upon the appellants. There was a serious dispute at the trial as to whether the impact upon the appellants reached the point of a recognized psychiatric disorder such as post-traumatic stress disorder. However, in view of my conclusion in the companion appeal I need not review that evidence.

The Trial Judge's Reasons

[13] As indicated, the trial judge held that the claim for nervous shock was not made out.

[14] With respect to the claim under s. 61(2)(e) of the Family Law Act for loss of guidance, care and companionship, the trial judge held that while the loss of a 19-year-old son was a most traumatic and sad event, the evidence did not disclose any basis for anything other than "conventional awards". He awarded Dana $25,000 and Cecil $15,000. He did not give any reasons for distinguishing between the two appellants.

[15] In supplementary reasons, the trial judge dealt with the effect of s. 267 of the Insurance Act. He held that the no- fault benefits paid to the appellants by their automobile insurer and the disability benefits paid to Cecil by his disability insurer were to be deducted from the Family Law Act awards. Finally, the trial judge noted that the appellants conceded that the $10,000 death benefits paid in accordance with s. 11 of the Statutory Accident Benefits Schedule -- Accidents Before January 1, 1994, R.R.O. 1990, Reg. 672 had to be deducted from the awards. In the result, the appellants did not make any recovery on their claims.

Analysis

The Family Law Act awards

[16] The trial judge made awards under s. 61(2)(e) of the Family Law Act of $25,000 to Dana and $15,000 to Cecil. These awards were made for loss of Jeremy's care, guidance and companionship. At the time of his death, Jeremy was 19 years of age and living at home. He had a close, loving relationship with his parents and brother.

[17] As indicated earlier, the trial judge made what he considered to be "conventional awards". To date, this court has not recognized conventional awards in these cases. Rather, the amount of compensation in any given case will depend on the facts and circumstances in evidence in the case: see Nielsen v. Kaufmann (1986), 1986 2717 (ON CA), 54 O.R. (2d) 188, 13 O.A.C. 32 (C.A.) and Reidy v. McLeod (1986), 1986 2556 (ON CA), 54 O.R. (2d) 661, 27 D.L.R. (4th) 317 (C.A.).

[18] Nevertheless, in my view this error did not affect the correctness of the awards. While it is my view that these awards are low, they were within the accepted range for this type of case, albeit at the very bottom of that range. The limits of appellate review of damage awards are well settled. The Court of Appeal should not interfere merely because it would have come to a different conclusion: Woelk v. Halvorson, 1980 17 (SCC), [1980] 2 S.C.R. 430 at p. 435, 114 D.L.R. (3d) 385; Koukounakis v. Stainrod (1995), 1995 621 (ON CA), 23 O.R. (3d) 299 at p. 305, 12 M.V.R. (3d) 78 (C.A.) and Howes v. Crosby (1984), 1984 2172 (ON CA), 45 O.R. (2d) 449 at p. 459, 6 D.L.R. (4th) 698 (C.A.).

[19] The evidence called by the appellants at the trial was almost solely directed to the impact of Jeremy's death upon the appellants, rather than the loss of Jeremy's care, guidance and companionship. There can be no question of the enormous grief and mental anguish suffered by the appellants but as this court said in Reidy v. McLeod, at p. 662, "losses of this kind are non-compensable". There was no evidence to take this case out of the general range of damages that has been awarded in cases involving the death of a teenage child. This case is not unlike Hamilton v. Canadian National Railway Co. (1991), 1991 8348 (ON CA), 80 D.L.R. (4th) 470 at p. 472, 47 O.A.C. 329 (C.A.), where the court observed that it would not be overstating the case to say that "there was very little evidence on the record that would have entitled members of the . . . family to damages in addition to those attributable to their immediate relationship with the deceased."

The impact of [s. 267](https://www.canlii.org/en/on/laws/stat/rso-1990-c-i8/latest/rso-1990-c-i8.html#sec267_smooth) of the [Insurance Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-i8/latest/rso-1990-c-i8.html)

[20] The trial judge reduced the Family Law Act awards to the appellants by the amounts they received for no fault accident benefits from their automobile insurer and the amount Cecil received from his disability insurer. In doing so, the trial judge purported to apply s. 267 of the Insurance Act. Section 267 provides, in part, as follows:

267(1) The damages awarded to a person in a proceeding for loss or damage arising directly or indirectly from the use or operation of an automobile shall be reduced by,

(a) all payments that the person has received or that were or are available for no-fault benefits and by the present value of any no-fault benefits to which the person is entitled;

(c) all payments that the person has received or that were or are available for loss of income under the laws of any jurisdiction or under an income continuation benefit plan and by the present value of any such payments to which the person is entitled;

[21] The trial judge's decision was in accord with a line of cases in the General Division. [See Note 1 at end of document] Those cases had interpreted s. 267(1)(a) of the Insurance Act as requiring that all no-fault benefits be deducted from any damages awarded in a tort action arising out of an automobile accident regardless of whether the damages were awarded for a type of loss akin to that for which the no-fault benefits were intended to compensate. The respondent conceded that in light of this court's decision in Bannon v. McNeely (1998), 1998 4486 (ON CA), 38 O.R. (3d) 659, 159 D.L.R. (4th) 223 (C.A.), only the $10,000 death benefits paid to each of the appellants should be deducted from the Family Law Act awards. I agree with that concession as it applies to the awards made under s. 61(2)(e). I will return to this issue below as it applies to an award under s. 61(1).

[22] In oral argument of the appeal, counsel for the appellants raised the deductibility of the death benefits. Counsel for the appellant had conceded this issue at trial and it is not raised in their factum. In any event, I agree with the respondent that these death benefits are properly deducted. There will not always be an exact correspondence between the head of damage in the tort award and the benefit made in accordance with the Statutory Accident Benefits Schedule. In the words of Finlayson J.A. in Bannon v. McNeely, at p. 679, "if at all possible" any no-fault benefit must be deducted from a head of damage "akin to" that for which the benefit was intended to compensate. In my view, the award under s. 61(2)(e) is akin to the death benefit. Both attempt, in some measure, to compensate the parents solely for the loss of the child ("dependant" under the Schedule), outside of any other pecuniary losses that the parents may have incurred, such as funeral costs or income losses that are covered in other parts of the Schedule.

[23] In my view, this result does not conflict with this court's decision in Dall Estate v. Adams (1994), 1994 424 (ON CA), 19 O.R. (3d) 93, 116 D.L.R. (4th) 189. In that case, this court held that benefits received by a spouse under the Public Service Superannuation Act, R.S.C. 1985, c. P-36, and the Canada Pension Plan, R.S.C. 1985, c. C-8 could not be deducted from an award made under the Family Law Act. The provision under consideration in that case was s. 267(1)(c) of the Insurance Act. Austin J.A. gave two reasons for this conclusion. First, he held that the survivor's payments the spouse received in accordance with these statutes could not be said to be "for loss of income" or a "continuation" of any income she had received before within the meaning of s. 267(1)(c).

[24] However, Austin J.A. also held that s. 267(1)(c) could not apply in light of the provisions of s. 63 of the Family Law Act. He reasoned as follows at p. 96:

On a more general basis, the interpretation of s. 267(1)(c) urged by the defendants, appears to conflict with s. 63 of the Family Law Act, which reads as follows:

63. In assessing damages in an action brought under this Part, the courts shall not take into account any sum paid or payable as a result of the death or injury under a contract of insurance.

In Canadian Pacific Ltd. v. Gill, 1973 2 (SCC), [1973] S.C.R. 654, 37 D.L.R. (3d) 229, the Supreme Court of Canada held that a similar provision in the Families Compensation Act, R.S.B.C. 1960, c. 138, was applicable to payments under that Canada Pension Plan. In Crew Estate v. Nicholson (1989), 68 O.R. (2d) 232, 1989 4234 (ON CA), 58 D.L.R. (4th) 111, this court held that survivors' benefits payable under the Public Service Superannuation Act, R.S.O. 1980, c. 419, were equally non- deductible.

The defendants argue that s. 267(1)(c) is of more recent origin and is more specific and accordingly should override s. 63 of the Family Law Act in the case of claims arising out of motor vehicles only. In my view, having regard to the degree to which the non-deductibility of the type of benefits in issue in these proceedings had been established in Ontario, as well as elsewhere in Canada, it would have taken the clearest of language to displace it. That description does not fit the language of s. 267(1)(c). More particularly, the legislation which brought about the new approach in the fall of 1989 referred with particularity to a host of affected statutes, including the Health Insurance Act, R.S.O. 1990, c. H.6, the Corporations Tax Act, R.S.O. 1990, c. C.40, the Credit Unions and Caisses Populaires Act, R.S.O. 1990, c. C.44, and the Registered Insurance Brokers Act, R.S.O. 1990, c. R.19. It did not, however, refer to the Family Law Act, s. 63, leaving the inference that there was no legislative intention to alter that provision.

(Emphasis added)

[25] The language of s. 267(1)(a) is different from that in s. 267(1)(c). It expressly refers to "all payments that the person has received . . . for no fault benefits". In my view, the death benefits were properly deducted from the Family Law Act awards: see Gorrie v. Gill (1975), 1975 414 (ON CA), 9 O.R. (2d) 73, 59 D.L.R. (3d) 481 (C.A.) and Fong v. Bamford (1995), 1995 7107 (ON SC), 25 O.R. (3d) 147, 15 M.V.R. (3d) 254 (Gen. Div.).

Loss of income under [s. 61(1)](https://www.canlii.org/en/on/laws/stat/rso-1990-c-f3/latest/rso-1990-c-f3.html#sec61subsec1_smooth) of the [Family Law Act](https://www.canlii.org/en/on/laws/stat/rso-1990-c-f3/latest/rso-1990-c-f3.html)

[26] The majority of this court in the companion appeal has held that the appellants are entitled to make a claim for loss of income under s. 61(1) of the Family Law Act. The trial judge did not deal with this issue because he reversed his earlier ruling made on the Rule 21 motion and, following Frawley v. Asselstine (1990), 1990 6803 (ON SC), 73 O.R. (2d) 525, 70 D.L.R. (4th) 536 (H.C.J.), held that the appellants were not entitled to make a claim for loss of income. In the result, he did not make any of the findings required to determine the validity and amount of the Family Law Act claim. In my view, this court is in no position to determine those issues and accordingly there must be a new trial with respect to the appellants' Family Law Act claim.

[27] Should the appellants succeed in proving a loss of income claim under s. 61(1), it will be necessary for the trial judge on the new trial to consider whether the no-fault accident benefits from the automobile insurer and the amount received by Cecil from his disability insurer should be deducted from that award in light of Bannon v. McNeely, supra. The deductibility of those benefits from a s. 61(1) award for loss of income was not argued before this court and in any event cannot be finally dealt with until the validity of the s. 61(1) claim is determined.

Disposition

[28] Accordingly, I would allow the appeal, in part. In accordance with s. 267 of the Insurance Act, only the $10,000 death benefits are to be deducted from the Family Law Act awards made at trial. I would allow the appeal with respect to the claim for loss of income under s. 61(1) of the Family Law Act and order a new trial on that matter. It will be for the trial judge at the new trial to consider whether the other accident benefits should be deducted from that claim, if established. In all other respects I would dismiss the appeal.

[29] The appellants have achieved sufficient success on the appeal that in my view, they are entitled to their costs of the appeal. At trial, apparently as a result of offers to settle from the respondent, Yates J. ordered that the respondent pay the appellants their party-and-party costs up to and including August 5, 1992 and thereafter the appellants pay the respondent his party-and-party costs. It may be that because of the disposition of the appeal, this costs order is no longer appropriate. I would invite the parties to make written submissions concerning the costs at trial.

Appeal allowed in part.

Notes

Note 1: See for example, Marshall v. Heliotis (1993), 1993 5505 (ON SC), 16 O.R. (3d) 637, [1994] I.L.R. 1-3023 (Gen.Div.).